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Canadian money in offshore tax havens hits record high

OTTAWA- Canadian money stashed in 10 offshore tax havens hit $170 billion in 2013. That’s $15 billion more than in 2012, according to Canadians for Tax Fairness using new data from Statistics Canada. The money flowing to tax havens is growing at a faster rate than investment in non-tax haven countries. At least 40 per cent of all Canadian direct foreign investment is held by the finance and insurance industry.

Three offshore tax havens, Barbados, Cayman Islands and Luxembourg hold more than $124 billion of Canadian money compared to $87 billion in 2010.

“This government can’t just shrug its shoulders and be outmaneuvered by corporations and very rich people looking to get even richer at the expense of the rest of us,” says Dennis Howlett, executive director of Canadians for Tax Fairness. “The Canada Revenue Agency needs the resources and political will to tackle tax havens.

Federal and provincial governments lose an estimated $7.8 billion in tax revenues each year because of tax havens. “The scale of the problem gets larger while the federal government cuts back on food safety, rail inspections and services for veterans and their families,” Howlett says.

Statistics Canada has released information on fewer tax haven countries this year. Bahamas is a popular tax haven for Canadian banks and investment firms. It was dropped from the StatsCan report even though in 2010 it held $14.5 billion in Canadian money. That can indicate that the $14.5 billion is in a few hands and not reported for confidentiality reasons, Howlett says. If Bahamas held at least as much money in 2013 as it did in 2010, then offshore money would add up to $185 billion.

Last year, Canada made commitments to the G8 to clamp down on a tax haven epidemic estimated at $30 trillion globally.

However the 2013 federal budget did little to support that commitment.